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Money Monday with Brian James · Brian Thomas

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Speaker 1: At lace a little less haunting than join us at
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Speaker 1: fifty five KRC dot com eight o.
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Speaker 2: Five on a Monday, it is that time every Monday.
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Speaker 2: This time we need to talk with Brian James from
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Speaker 2: all Worth Financial East Financial Planning. He knows about Monday money,
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Speaker 2: so that's why we call this money Monday with Brian James.
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Speaker 2: Welcome back, Brian. I hope you had a good weekend.
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Speaker 3: Good morning, happy fall and cold weather to you. Brian Thomas.
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Speaker 2: Hey, look, the federal government's still shut down.
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Speaker 3: Brian like that.
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Speaker 4: I think they figured out that the weather was not
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Speaker 4: gonna be warm today, so we're just not gonna get
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Speaker 4: out of bed.
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Speaker 2: Yeah. Well they got no kings out of their system
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Speaker 2: over the weekend. Not quite sure what that was all
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Speaker 2: about or what they hope to accomplish, but the government's
0:37
Speaker 2: still shut down. I think one of the reasons it
0:38
Speaker 2: was still shut down is because they knew that event
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Speaker 2: was coming. I want to show how angry and upset
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Speaker 2: American people are, generally speaking. It was top of the
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Speaker 2: our article or news report about all the different reasons
0:48
Speaker 2: people might have shown up, and they're disparate and diverse
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Speaker 2: reasons for showing up. But the government still remains shut down,
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Speaker 2: and there doesn't seem to be any any end in sight,
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Speaker 2: I think, at least from a political standpoint. It's been
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Speaker 2: noted in the Wall Street Channel reporting on this about
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Speaker 2: running out of time to figure out how to solve
1:05
Speaker 2: this problem. If they have enough time. So many people
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Speaker 2: got on Obamacare when the premiums were waived and was
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Speaker 2: considered free, and a lot of Republicans in Republican states also.
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Speaker 2: They also suggest there's polling out there showing strong support
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Speaker 2: for continuing these so called enhanced subsidies, notwithstanding the fact
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Speaker 2: that it's going to set us into the whole even
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Speaker 2: what three hundred and fifty plus billion dollars over the
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Speaker 2: next ten years these were set to expire. Brian, I
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Speaker 2: don't understand what the problem is. The Democrats wrote in
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Speaker 2: the original language the subsidies were are the cap on
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Speaker 2: premiums was waived because of COVID nineteen and they put
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Speaker 2: an end date that's this year. This had to come
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Speaker 2: at some point, Brian. So I don't understand. It doesn't
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Speaker 2: make any sense to me to continue to keep the
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Speaker 2: government shut down.
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Speaker 3: Yeah, I think that's where we are.
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Speaker 4: We set up a program that was very popular and
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Speaker 4: made it easy to be a part of it, and
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Speaker 4: didn't really set up the funding mechanism.
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Speaker 3: Well, we did that.
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Speaker 4: We did have the funding mechanism set up, but that
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Speaker 4: was the first thing that the Republicans were able to
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Speaker 4: unwind years ago. But they were not able to unwind
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Speaker 4: the program itself. So we have the expense without the
2:16
Speaker 4: ability to cover that expense the way it was originally designed.
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Speaker 2: So yeah, the thing that they got rid of was, well,
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Speaker 2: the Supreme Court said you can't force someone to buy
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Speaker 2: something they don't want to buy. So the whole funding mechanism,
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Speaker 2: which is every American must buy a health insurance policy
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Speaker 2: welcome to Obamacare and market plans, that was supposed to
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Speaker 2: support all of the pre existing people that were going
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Speaker 2: to jump on and obviously create a tremendous claims demand,
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Speaker 2: you know, actuarily, it was a nightmare as the outset.
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Speaker 2: But once you were once you were legally told that
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Speaker 2: you can't use the commerce clause to force someone to
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Speaker 2: do something, then all the people that weren't forced to
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Speaker 2: buy it didn't buy it. So the rest were a
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Speaker 2: bunch of people with high claims exposure. That's a rescue disaster.
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Speaker 4: We got, and that there's a fancy insurance word called
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Speaker 4: adverse selection, which basically means if you make it this
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Speaker 4: easy for everybody to get but it's not required, then
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Speaker 4: essentially what you're going to get is the people who
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Speaker 4: need the insurance most and are the most expensive risks,
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Speaker 4: and you're not going to get the funding from the
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Speaker 4: people who would have just been writing the checks but
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Speaker 4: otherwise would be healthy and not funding the system. So ironically,
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Speaker 4: like you said, we can't force anybody to buy something
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Speaker 4: they don't want to buy, but we can force the
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Speaker 4: government to buy a lot of stuff that it doesn't
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Speaker 4: want to buy.
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Speaker 3: We didn't really talk about.
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Speaker 2: That day, No, we didn't, all right, So there's the
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Speaker 2: genesis behind the shut down. We are, regardless of the
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Speaker 2: reasons why, still in a shutdown. The question is it
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Speaker 2: impacting the American people generally speaking? So in my experience
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Speaker 2: in my circles, no, because I'm not friends with or
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Speaker 2: acquainted with or close to anybody at least that's working
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Speaker 2: for the federal government. Although i do have a niece
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Speaker 2: that's currently unemployed to Washington, DC, so there's one. But
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Speaker 2: is this a large and looming problem and I suppose
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Speaker 2: ultimately it is going to impact services that more and
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Speaker 2: more people do rely on. Where is this taking us,
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Speaker 2: Brian James.
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Speaker 3: Well, it's already.
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Speaker 4: It already is impacting services that people rely on, as
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Speaker 4: evidence by the fact that Washington is actually recalling staff
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Speaker 4: just to print the CPI number, because that's how many
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Speaker 4: dominoes came out of this one report. So social security,
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Speaker 4: cost of living adjustments, inflation link bond, next year's four
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Speaker 4: to one k caps are all things that are impacted
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Speaker 4: by inflation, and somebody has to make these decisions. So yeah,
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Speaker 4: they actually are bringing people back off of furlough to make.
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Speaker 3: These decisions so that we can move forward. I don't
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Speaker 3: know that.
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Speaker 4: Maybe maybe we didn't think this one was going to
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Speaker 4: last very long. We're on day thirty. By the end
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Speaker 4: of this week we will be I believe this will
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Speaker 4: be the longest shutdown in history. If I recall correctly,
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Speaker 4: I think it was thirty four days. So end of
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Speaker 4: Friday we will be looking at the longest shutdown since
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Speaker 4: that they're not even in the same room. I feel
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Speaker 4: pretty confident we're going to break that record.
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Speaker 2: So the further workers that do the Consumer Price Index
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Speaker 2: are being brought back, So I guess they're essential and
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Speaker 2: critical to the extent they need to be there to
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Speaker 2: figure out security checks, bonds and four one K issues.
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Speaker 3: Yeah, that's exactly right.
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Speaker 4: I mean there are some things we just cannot get
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Speaker 4: away with just not doing so in some of those
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Speaker 4: things are the Bureau Labor Statistics is going to publish
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Speaker 4: the September CPI eight thirty am on Thursday the twenty fourth,
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Speaker 4: that's this Thursday, doing that anyway, despite the shutdown.
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Speaker 3: That's why they recalled the staff.
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Speaker 4: No other reports though until the service is resumed back
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Speaker 4: to normal, So that's going to keep statutory deadlines for
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Speaker 4: programs that depend on CPI. In other words, we have
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Speaker 4: things codified in the law that say we have to
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Speaker 4: do this, so there really is no choices havet to
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Speaker 4: bring these people back. So that does mean the FED
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Speaker 4: and the markets overall are kind of flying a flying blind,
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Speaker 4: flying by wire, if you will, during this shutdown. That
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Speaker 4: raises policy uncertainty heading and there's a FED meeting October
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Speaker 4: twenty eighth and twenty ninth, Well, they're going to be
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Speaker 4: struggling a little bit to get the complete picture. And
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Speaker 4: of course Social Security COLA timing as mentioned, that is
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Speaker 4: supposed to be October twenty fourth. That'll come quickly after CPI.
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Speaker 4: That's the plan right now. We'll see how this works out.
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Speaker 2: Which I'm guessing has the effect of taking some of
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Speaker 2: the sting out of the government being shut downs. If
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Speaker 2: those you know, like for example, the coal of the
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Speaker 2: cost of living adjustment for Social Security, if our seniors
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Speaker 2: get that, then they're not going to be feeling the
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Speaker 2: sting of the government shut.
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Speaker 4: Down, right And I would I would assume that the
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Speaker 4: depending on the side of the aisle you're on, as
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Speaker 4: always actually probably both sides were hoping for this, that
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Speaker 4: people would feel some pain, so they would push for
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Speaker 4: resolution one way or another. Well, this is a reason
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Speaker 4: for a large chunk of the population to go, eh,
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Speaker 4: this doesn't affect.
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Speaker 2: Me right well, in that pain, I suppose going back
6:29
Speaker 2: to the issue that's really keeping the government shut down,
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Speaker 2: these supplements for Obamacare. Twenty million or so folks getting
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Speaker 2: that right now. I mean that's big, big number, absolutely
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Speaker 2: for sure.
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Speaker 4: And so we're hung up on these the subsidies out there.
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Speaker 4: And because there are a normal enormous amount of people
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Speaker 4: who are going to go without health insurance, under the
6:50
Speaker 4: current path, and I would find it hard to believe
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Speaker 4: that there aren't some people that, no matter what happens,
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Speaker 4: aren't going to lose it, because this is going to
6:56
Speaker 4: have to come down to some kind of begrudging compromise
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Speaker 4: which some people are going to sacrifice the health insurance.
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Speaker 3: Those people are going to.
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Speaker 4: Get very loud, very soon, and I suspect many of
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Speaker 4: them were out marching over this past weekend.
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Speaker 2: Well, it's kind of funny in a certain way. If
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Speaker 2: it's four hundred percent of poverty level, which is the
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Speaker 2: cap that's going to go back into effect, this fault
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Speaker 2: the people who are getting supplements that make more than that,
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Speaker 2: Basically they're probably paying federal income tax.
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Speaker 4: You would think so, right, So they've got enough income
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Speaker 4: coming in it's the issue.
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Speaker 2: Yeah, And so ultimately they're getting a taxpayer supported supplement
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Speaker 2: to make it look like they don't have a premium,
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Speaker 2: but they're ultimately paying the costs of that because they
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Speaker 2: pay federal income tax, because all of this is coming
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Speaker 2: out of the federal income tax revenue.
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Speaker 3: Yeah, that's that's absolute, right. So that's why we are
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Speaker 3: doing so much about it.
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Speaker 4: It's going to move the needle for a lot of
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Speaker 4: folks for sure, and both sides are going to use
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Speaker 4: that to their advantage.
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Speaker 2: All right, So I understand the COLA and so security
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Speaker 2: with the CPI, I guess I get the bond component.
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Speaker 2: But what of the four how does this impact the
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Speaker 2: CPI index? How does it impact four one K?
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Speaker 3: Yeah, so four O one K and I and IRA
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Speaker 3: limits too.
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Speaker 4: So the IRS uses if QU three CPI in their
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Speaker 4: fall announcements to decide what the four roh one K
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Speaker 4: limits are going to be. Now, I can't say this
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Speaker 4: is gonna Nobody is protesting because they can't put enough
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Speaker 4: into their four oh one ks. And I think that's
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Speaker 4: a pretty tiny swath of the population.
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Speaker 3: But so so the.
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Speaker 4: The early actuarial calls are looking at a deferral amount
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Speaker 4: of twenty four thousand, five hundred for twenty six Now,
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Speaker 4: that would be up one thousand dollars. That's the amount
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Speaker 4: that everybody under the sun can put in. If you're
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Speaker 4: fifty plus, you could put in another eight thousand dollars,
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Speaker 4: so that would total thirty two and a half for
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Speaker 4: those over fifty.
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Speaker 3: And then the don't forget.
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Speaker 4: The Secure Act two point zero put a super ketchup
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Speaker 4: in for those age sixty to sixty three, and that
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Speaker 4: would likely if you're in that window, you're likely around
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Speaker 4: thirty five thousand, seven hundred and fifty. So again, those
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Speaker 4: numbers are going to depend on September CPI. I don't
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Speaker 4: imagine there's gonna be a whole lot of protesting over
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Speaker 4: that particular.
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Speaker 2: No, no, And I suppose you're an mbuable position if
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Speaker 2: you can afford to do that super contribution right basically
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Speaker 2: hand over thirty four thousand dollars right exactly.
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Speaker 4: And that's the concessions.
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Speaker 3: That we're given.
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Speaker 4: We for a long time have been making decisions to
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Speaker 4: allow people to make it more attractive for people to
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Speaker 4: fund their own retirements, and that's what this is all about.
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Speaker 4: This goes back to when I first started in for
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Speaker 4: a bank in the late nineties. The big hue and
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Speaker 4: cry was that they were eliminating the original pension that
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Speaker 4: had cost the head inflation and all that stuff built
9:24
Speaker 4: into it.
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Speaker 3: And I didn't know what it meant. I was young,
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Speaker 3: I was twenty three and stupid.
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Speaker 4: Now I kind of get it, but the whole point
9:29
Speaker 4: of that frustration was that was just a well, we're
9:32
Speaker 4: going to take the pension away but we're going to
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Speaker 4: make it better for you. We're going to increase the
9:36
Speaker 4: match on the four oh one K and all those
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Speaker 4: kinds of things to make it more attractive for you
9:39
Speaker 4: to fund your own retirement as opposed to relying on
9:41
Speaker 4: your employer or the government.
9:43
Speaker 3: That works great as long as people.
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Speaker 4: Have the money to do it and know how and
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Speaker 4: understand how important it is, and that keeps me employed.
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Speaker 2: Well, and maybe we're not doing so well. We'll probably
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Speaker 2: go out of order and just use this opportunity as
9:54
Speaker 2: a segue to the report card Americans get when it
9:57
Speaker 2: comes to saving for retirement. Of the topic, we'll talk
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Speaker 2: about Brian James coming up four one ks are directly
10:02
Speaker 2: tied to the stock market more than ever? Or is
10:05
Speaker 2: that your financial planner's problem is at the right place
10:07
Speaker 2: to be. We'll continue with Brian James Money Monday. It's
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Speaker 2: eight sixteen right now. If I have KC the talk
10:11
Speaker 2: station speaking of money matters for your the talk station,
10:17
Speaker 2: Ay twenty on a Monday, we're doing Money Monday with
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Speaker 2: Brian James from all Worth Financial.
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Speaker 3: All right, Brian, I.
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Speaker 2: Said, I want to take a little bit out of
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Speaker 2: order since you mentioned about financial are about preparing for retirement.
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Speaker 2: And we have the CPI that's coming out in important
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Speaker 2: I guess necessary government work. So no worries about your
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Speaker 2: coal adjustment for Social Security. But what of our own grade,
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Speaker 2: the report card grade when it comes to Americans preparing
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Speaker 2: for retirement, generally speaking, it does not look good.
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Speaker 4: Brian, Well, yeah, and a lot of this is because
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Speaker 4: it's just hard to do this with prices being where
10:52
Speaker 4: they are.
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Speaker 3: There's only so much money left over.
10:54
Speaker 4: And we've made the as I was saying a little
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Speaker 4: bit a little bit ago, as a country, as a society,
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Speaker 4: we've made a pivot toward pull yourself up by your
11:01
Speaker 4: own bootstraps.
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Speaker 3: So you need to save your own money.
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Speaker 4: But if people don't have the ability to have a
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Speaker 4: little surplus at the end of every month, and there's
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Speaker 4: not much that's going to be able to go in.
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Speaker 4: But so investors are and savers are banking up for
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Speaker 4: that by being really really aggressive in their four oh
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Speaker 4: one k. So this is a study coming from Vanguarden
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Speaker 4: Morning Star, coming through the Wall Street Journal. So workers
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Speaker 4: in their late thirties now hold about eighty eight percent
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Speaker 4: of their four roh one k assets in stocks or
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Speaker 4: stock fund equivalents, and that's up from about eighty two
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Speaker 4: percent a decade ago.
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Speaker 3: That makes logical sense to me. I'm not concerned about that.
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Speaker 4: I don't think you can be too aggressive if you're
11:36
Speaker 4: in your late thirties when.
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Speaker 3: You're talking about a four oh one K.
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Speaker 4: And what we're really talking about here, Brian, is these
11:42
Speaker 4: people who have eighty eight percent of their four to
11:43
Speaker 4: one K assets and they're in their late thirties. That
11:45
Speaker 4: means they got twelve percent on the bond side, on
11:48
Speaker 4: the fixed income side. There's only so much you can
11:49
Speaker 4: do with a four to oh one case. There aren't
11:51
Speaker 4: exotic holdings out there. I personally believe if you're in
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Speaker 4: your thirties, you shouldn't have any bonds.
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Speaker 3: What point? What difference does it make?
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Speaker 4: You're looking at a thirty plus year time frame to
12:01
Speaker 4: touch these assets, and if you're handling things the right way,
12:04
Speaker 4: then you shouldn't be panicking when the market wobbles anyway. So, frankly,
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Speaker 4: I think if you're in your thirties, b one hundred
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Speaker 4: percent stocks. I'm fifty one, Brian, and I myself am
12:12
Speaker 4: one hundred percent stocks. I don't care the market's going
12:14
Speaker 4: to kick me. Around two or three more times before
12:16
Speaker 4: I actually retire in the next ten to fifteen years.
12:18
Speaker 4: And I'm not going to panic because I know how
12:20
Speaker 4: the market works. I know my market history. So I
12:22
Speaker 4: think people are simply looking at what do I need
12:24
Speaker 4: to do to make this ship float for me, because
12:25
Speaker 4: they don't have a pension anymore. If I'm in my
12:28
Speaker 4: late thirties, then social Security. The best way to plan
12:31
Speaker 4: for that is probably that it's going to be reduced
12:33
Speaker 4: by about twenty five to thirty percent, because that's unless
12:35
Speaker 4: we actually fix that funding mechanism and tax people more somehow.
12:40
Speaker 4: So if I have to grow my own assets, I
12:41
Speaker 4: may as well do it the best way possible, and
12:43
Speaker 4: that is stocks, not bond. So I'm not concerned about
12:46
Speaker 4: that particular point.
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Speaker 2: Okay, Now when it comes to the folks that are
12:50
Speaker 2: looking at a very small amount left over after the
12:53
Speaker 2: necessary bills are concerned. Is there a recommendation you can
12:56
Speaker 2: give to those folks in order to at least start
12:59
Speaker 2: the process. I mean, if you have just a little bit,
13:01
Speaker 2: it's better than doing nothing in further in so of
13:03
Speaker 2: your retirement. I mean, I I fortunately was really not
13:07
Speaker 2: placed in that position too much. Most notably because I
13:09
Speaker 2: married out of my element, both of us at a
13:11
Speaker 2: salary that we could afford to put there collectively some
13:14
Speaker 2: portion of our total pile of money toward retirement. So
13:18
Speaker 2: not everybody has the benefit of that.
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Speaker 3: Yeah, that's absolutely true, and those are the people.
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Speaker 4: Unfortunately, they're going to be struggling because our our retirement
13:25
Speaker 4: system we have chosen as a society by the leaders
13:28
Speaker 4: we've put in office. We have chosen to build it
13:30
Speaker 4: all based off of the success of public traded companies.
13:33
Speaker 4: That's and investors are simply reacting to what is put
13:36
Speaker 4: in front of them. There just isn't much else out
13:38
Speaker 4: there that you can do when when prices are rising
13:41
Speaker 4: as fast as they are, when it's as expensive to
13:43
Speaker 4: live as it currently is, you just need something that's
13:46
Speaker 4: going to keep up with it, and stock market is
13:48
Speaker 4: just about the only thing out there to do that.
13:51
Speaker 3: And go ahead.
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Speaker 2: I was just going to say, wasn't it designed for
13:54
Speaker 2: that purpose to boast in bolster capitalism and hopefully to
13:58
Speaker 2: encourage investment in my American companies because we started this process.
14:02
Speaker 2: You know, the best place to invest in the world
14:05
Speaker 2: in terms of return on investment is going to be
14:07
Speaker 2: American companies.
14:08
Speaker 4: Yeah, and it still is and it will be for
14:10
Speaker 4: a long time to come because just because of what
14:11
Speaker 4: we have spent hundreds of years building. But what that does,
14:14
Speaker 4: that's what this is why I always refer to us
14:16
Speaker 4: as the we're the United States a profit margin. That
14:18
Speaker 4: means every decision that we make it has an eye
14:21
Speaker 4: toward making sure that our publicly traded companies that feel
14:25
Speaker 4: like they can make a profit to keep them here. Frankly,
14:28
Speaker 4: because there's nothing stopping a company, and this could happen,
14:30
Speaker 4: right for those who are worried about you know, the
14:32
Speaker 4: United States is going to need to tax itself to
14:34
Speaker 4: death and so forth. So I don't want to be
14:35
Speaker 4: in the US stock market. Well why wouldn't you, Because
14:37
Speaker 4: there's no entity more able to pick up and move
14:40
Speaker 4: than the richest ones on the face of the earth.
14:42
Speaker 4: So if our tax policies become such that it's unattractive
14:45
Speaker 4: to do business here, then they simply won't. They'll pick
14:48
Speaker 4: up and move to another company, keep or to another country,
14:50
Speaker 4: keep selling the same products and services that they do
14:53
Speaker 4: in a more taxable or a more tax efficient manner.
14:55
Speaker 4: So I would still say the US stock market is
14:57
Speaker 4: the safest growth oriented type of market to be in.
15:00
Speaker 4: Because of that flexibility, those companies won't they don't have
15:03
Speaker 4: to stay us.
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Speaker 3: And I'm not saying this is going to happen anytime soon.
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Speaker 4: I'm just saying that I don't think they're sweating it
15:08
Speaker 4: too much that they'd be painted into a corner and
15:10
Speaker 4: simply have to pay more taxes without some kind of
15:12
Speaker 4: a reaction.
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Speaker 2: All right, Brian James, I'll hold you over for one
15:14
Speaker 2: more segment, and I want to address something else that
15:17
Speaker 2: I know people can invest in relative comparative or compared
15:20
Speaker 2: to this stock market. But I'm scratching my head over
15:23
Speaker 2: whether or not people might already be invested in it.
15:25
Speaker 2: Stick around more with Brian James from Alworth Financial. It's
15:27
Speaker 2: eight twenty five right now, fifty five kr CD talk Station.
15:30
Speaker 1: Fifty five station eight twenty nine, fifty five care CD
15:34
Speaker 1: Talk Station Brian Thomas and Brian James, Money Monday, getting
15:37
Speaker 1: one more segment in Brian James, we don't talk about
15:40
Speaker 1: very often, and I think when we have talked about
15:43
Speaker 1: it as an investment vehicle, I think you've kind of
15:46
Speaker 1: and I don't want to put words in your mouth.
15:47
Speaker 1: That's what you're there for to correct me if I'm wrong,
15:49
Speaker 1: but considering it probably not a good idea, but one
15:52
Speaker 1: of the things I'm looking at. Since January twenty twenty three,
15:55
Speaker 1: the price of gold has gone through the roof. I mean,
15:58
Speaker 1: it was trading at eighteen hundred dollars in January twenty
16:01
Speaker 1: three and it's at right now forty three hundred dollars
16:05
Speaker 1: an ounce. So people who've been in that investment for
16:07
Speaker 1: the last couple of years have obviously seen a pretty
16:09
Speaker 1: significant return, at least in so far as a component
16:12
Speaker 1: of a four to oh one k or retirement investment vehicle.
16:15
Speaker 1: Is that something you can you should consider. I mean,
16:18
Speaker 1: the idea of sitting on physical gold always looked stupid
16:22
Speaker 1: to me because you can't eat it. In a bad situation,
16:26
Speaker 1: the fiat currency goes belly up. It may be worth something,
16:29
Speaker 1: but you can't eat it. You can't slice off a
16:31
Speaker 1: piece of it to buy something. I wouldn't accept it
16:34
Speaker 1: as payment for anything. I'd be looking for food and
16:36
Speaker 1: ammunition and whatever else hell else it is. I'd find
16:39
Speaker 1: myself needed in a desperate situation. But in terms of
16:42
Speaker 1: an investment vehicle, Brian, where are you on gold? And
16:44
Speaker 1: why has it gone up so much?
16:46
Speaker 3: Well, gold gold, yeah, is gaining a lot of attention.
16:49
Speaker 4: As you mentioned, it's over four thousand bucks per troy
16:51
Speaker 4: ounce for the first time, and this is about the
16:54
Speaker 4: strongest year since the late seventies.
16:56
Speaker 3: Because of that rise, and of.
16:58
Speaker 4: Course there are other there are new ways to get
17:00
Speaker 4: a hold of it as well, so that's driving demand.
17:02
Speaker 4: It used to be you can only buy gold bullion
17:04
Speaker 4: and stick it in the safe for the safety deposit
17:06
Speaker 4: box forever, but now you can use exchange traded funds.
17:09
Speaker 4: Gold backed exchange traded funds saw their largest semi annual
17:12
Speaker 4: inflow in several years this year.
17:13
Speaker 3: Of course, not too surprised to hear that.
17:15
Speaker 4: With everything, So the reason this is happening is all
17:17
Speaker 4: of of course, all when gold runs whenever there's instability
17:21
Speaker 4: in the win so geopolitical macroeconomic uncertainty. These are the
17:24
Speaker 4: weakening dollar, inflation concerns, central bank diversification, and just sort
17:30
Speaker 4: of the general chaos that our current government is in
17:32
Speaker 4: for a lot of reasons. So gold can be appealing
17:36
Speaker 4: as a head. You're kind of a safe haven when
17:38
Speaker 4: when interest rates are low, when confidence and major currencies
17:42
Speaker 4: kind of falls apart a little bit. But to your point,
17:45
Speaker 4: it's not an entity. It's not a vehicle that you
17:48
Speaker 4: can use. You can't expect it to come out with
17:50
Speaker 4: a new product. It's not going to generate dividends. It's
17:53
Speaker 4: not going to find a new market. It's simply something.
17:55
Speaker 4: It's a commodity. It's it's worth what people think it's worth.
17:58
Speaker 4: So those are the most dangerous kind of investments to
18:01
Speaker 4: invest in after the run has happened, meaning that since
18:05
Speaker 4: it's only worth what people think it's worth, the herd
18:08
Speaker 4: is eventually gonna peter out, there's going to be fewer
18:10
Speaker 4: people rushing into it.
18:12
Speaker 2: Well, let me ask you this. There is I mean
18:14
Speaker 2: ignoring the demand for jewelry, gold and jewelry whatever. That's
18:19
Speaker 2: it's a luxury item that people can do with that.
18:20
Speaker 2: I guess what do we know? What like some idea
18:23
Speaker 2: of what the global demand is for industrial use in
18:26
Speaker 2: other words, the stuff that we really need to use
18:29
Speaker 2: gold for. If we knew that number, we could kind
18:31
Speaker 2: of separate the wheat from the chaff and remove some
18:33
Speaker 2: of that flexibility out in there.
18:35
Speaker 3: Yeah, and it is, of course used.
18:37
Speaker 4: When we talk about it, we're usually talking about the
18:40
Speaker 4: herd stampeding into it because of the because of the
18:43
Speaker 4: general uncertainty that's out there, right, So, but to give
18:47
Speaker 4: give some numbers. So in twenty twenty four, for example,
18:50
Speaker 4: in jewelry, technology and other industrial that there's a lot.
18:54
Speaker 4: It's used a lot in dentistry and non electronic types
18:56
Speaker 4: of things, exactly.
18:57
Speaker 3: Yeah, so there's plenty of uses.
18:59
Speaker 4: Out there, but that was only seven percent of total
19:01
Speaker 4: demand in twenty twenty four. Oh really, yeah, back those
19:05
Speaker 4: types of electronics and that kind of thing. The demand
19:08
Speaker 4: largely comes from people kind of wanting to hoard it.
19:10
Speaker 3: That's there. Not as much gold as you might think
19:13
Speaker 3: out there too.
19:13
Speaker 2: Well, And that's the thing that always bothered me about
19:16
Speaker 2: it as an investmentry, because it is volatile in the
19:18
Speaker 2: sense that there are the gold bugs out there who
19:20
Speaker 2: do believe the fiat currency is going to collapse. It's
19:23
Speaker 2: like bitcoin, though it's always expressed in fiat currency value.
19:29
Speaker 4: That's right, And that's one of the reasons if you're
19:31
Speaker 4: buying gold, you're kind of resistant to fiat currency in general.
19:34
Speaker 4: You're wanting to go back to, you know, something that
19:36
Speaker 4: had some kind of standard besides a general agreement of
19:39
Speaker 4: what something is worth. But ironically that's the same thing
19:41
Speaker 4: that gold is. That's what a commodity is. Everybody agrees
19:44
Speaker 4: it's worth this particular amount, and that causes price wings
19:47
Speaker 4: that will trigger runs in that same asset as well
19:50
Speaker 4: as you know, runs in and runs out. And so
19:53
Speaker 4: that would probably be the next step is when does
19:55
Speaker 4: the herd decide that this demand cycle is over for
19:58
Speaker 4: it and goes the other way.
19:59
Speaker 2: Well, and it's one of a seemingly unlimited multitude of
20:03
Speaker 2: items that are used, you know, every single day in
20:06
Speaker 2: manufacturing or otherwise, like platinum, and you know, rare earth
20:10
Speaker 2: minerals are obviously in high demand now. So there's a
20:12
Speaker 2: whole bunch of things that could sort of you could
20:14
Speaker 2: you could choose other than gold is something to invest in,
20:17
Speaker 2: right if you're just paying attention to where the demand is, right.
20:20
Speaker 4: Negele like i said that the gold is not used
20:22
Speaker 4: in that many industrial type uses, such as some of
20:26
Speaker 4: the other things like that that all the devices of
20:28
Speaker 4: the stuff that goes into cell phones that we always argue.
20:30
Speaker 3: About, Right, gold is just not a thing. Copper, on
20:33
Speaker 3: the other hand, Copper is everywhere.
20:35
Speaker 4: Copper is an indicator of economic feast or famine based
20:38
Speaker 4: on how much copper we're consuming. That usually drives the economy,
20:41
Speaker 4: but gold doesn't show up anywhere except for in the
20:43
Speaker 4: overall investor sentiment.
20:45
Speaker 2: And going back to my let's say my financial planner,
20:48
Speaker 2: a good you know, fee based financial planner that is
20:51
Speaker 2: a fuciary obligation to you. Are they including typically one
20:55
Speaker 2: of these mixed mutual funds that you mentioned that it
20:58
Speaker 2: contains some of these industrial need always in demand gold, platinum,
21:03
Speaker 2: and other minerals and items. Am I invested in that
21:07
Speaker 2: for example?
21:08
Speaker 4: Yeah, probably a small percentage, but it's not going to
21:11
Speaker 4: be gold, because again, gold is it's just functioning like
21:13
Speaker 4: a commodity. But for those other types of things, and
21:16
Speaker 4: there's lots of ways to do it. You don't have
21:17
Speaker 4: to invest strictly in that asset, and you might invest
21:20
Speaker 4: in a miner of whatever that asset is, some company
21:23
Speaker 4: that produces it, pulls it out of the ground and
21:25
Speaker 4: processes it and makes it ready for industry. That's different
21:28
Speaker 4: than simply buying gold bullion and sticking in a box
21:30
Speaker 4: somewhere and declaring what it's worth on a daily basis.
21:33
Speaker 2: All right, well, I'm glad I asked you the question.
21:34
Speaker 2: Brian James. Always appreciate you coming on the show, and
21:37
Speaker 2: you want to say good morning to your group of
21:39
Speaker 2: secret female Money Monday fans.
21:42
Speaker 4: Hello ladies, I hope you enjoyed our special edition last week.
21:46
Speaker 4: Tang of questions from the audience. That kind of came
21:49
Speaker 4: out of the blue, but that was fun to do
21:50
Speaker 4: and I hope you found that useful.
21:51
Speaker 2: Thanks versus Federal credit Unions. Go ahead and check out
21:54
Speaker 2: the podcast from last week's discussion with Brian James. We'll
21:56
Speaker 2: get another one next Monday, Bunny Monday, Brian James, thanks
21:58
Speaker 2: for what you do. Appreciate all worth learning you out.
22:00
Speaker 2: We will have another discussion again on Monday. Have a
22:02
Speaker 2: great week.
22:03
Speaker 3: Thanks for the microphone. Talk to you next week.
22:04
Speaker 2: Looking forward to It's eight thirty five right now. I'm
22:06
Speaker 2: always looking forward talking to